Correlation Between Eldorado Gold and Ecovyst

Can any of the company-specific risk be diversified away by investing in both Eldorado Gold and Ecovyst at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Eldorado Gold and Ecovyst into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Eldorado Gold Corp and Ecovyst, you can compare the effects of market volatilities on Eldorado Gold and Ecovyst and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Eldorado Gold with a short position of Ecovyst. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eldorado Gold and Ecovyst.

Diversification Opportunities for Eldorado Gold and Ecovyst

0.01

Correlation Coefficient

Eldorado Gold  Ecovyst

Significant diversification

The 3 months correlation between Eldorado and Ecovyst is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Eldorado Gold Corp and Ecovyst in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecovyst and Eldorado Gold is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Eldorado Gold Corp are associated (or correlated) with Ecovyst. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecovyst has no effect on the direction of Eldorado Gold i.e., Eldorado Gold and Ecovyst go up and down completely randomly.

Pair Corralation between Eldorado Gold and Ecovyst

Considering the 90-day investment horizon Eldorado Gold Corp is expected to generate 1.13 times more return on investment than Ecovyst. However, Eldorado Gold is 1.13 times more volatile than Ecovyst. It trades about 0.04 of its potential returns per unit of risk. Ecovyst is currently generating about -0.07 per unit of risk. If you would invest  1,519  in Eldorado Gold Corp on December 20, 2024 and sell it today you would earn a total of  76.00  from holding Eldorado Gold Corp or generate 5.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Eldorado Gold Corp  vs.  Ecovyst

Eldorado Gold Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Eldorado Gold Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile technical and fundamental indicators, Eldorado Gold may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Ecovyst

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ecovyst has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Eldorado Gold and Ecovyst

The main advantage of trading using opposite Eldorado Gold and Ecovyst positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eldorado Gold position performs unexpectedly, Ecovyst can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Ecovyst will offset losses from the drop in Ecovyst's long position.

The idea behind Eldorado Gold Corp and Ecovyst pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.